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Is the Paris Agreement Unfair?

The Reality:

President Donald Trump’s announcement that he will pull the U.S. out of the Paris Agreement was one of the largest events of his presidency thus far. Both sides of the aisle and both sides of the media are pushing their narratives about this global agreement, but what’s the reality? Was the Paris Agreement unfair to the U.S.?

The Paris Agreement, named after the location in which it was negotiated, is an agreement between many of the world’s nations in which they pledge to reduce the damage done to the Earth’s climate. It was adopted on December 12, 2015. Initially, 195 members signed the agreement, and 151 went further and ratified it. So, what did these nations agree to?

The agreement’s objective, as defined in Article 2 of the agreement itself, is to “strengthen the global response to the threat of climate change.” The agreement sets out to accomplish this goal by:

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Figure 1 – Paris Agreement (English), Article 2, Paragraph 1, Lines (a), (b), and (c).

In layman’s terms, it plans on ensuring that the global average temperature doesn’t raise more than two degrees Celsius from “pre-industrial” levels, increasing our ability to react to the impacts of climate change and change our development methods to have less of an impact. It also urges countries to ensure that money is being spent on development methods that will be cleaner and safer for the Earth. So, how does the agreement actually accomplish this?

Due to the different levels of prosperity and development among Earth’s nations, the agreement couldn’t ask for equal contributions from its members so it asked for fair contributions instead. The agreement requests that nations reduce emissions and provide financial assistance relative to their current prosperity and development levels. But notice that I use words like “ask” and “request,” instead of “require.” The agreement has no enforcement arm and doesn’t require certain emissions or financial contributions. Each nation gets to set its own emissions goal through a written pledge called a Nationally Determined Contribution and chooses how much financial assistance they want to provide. The only thing the agreement specifically requests is that every five years, countries rewrite their NDCs to be more stringent with emissions and increase their financial assistance. So how “fair” did the nations make their pledges?

There’s quite a discrepancy among what nations have pledged to do and give financially. But, unlike Trump’s claim, the deal isn’t horrible for the U.S. In fact, it’s actually quite fair based on development and prosperity levels. The U.S. has definitely given more financially than most of the other nations in the agreement and has pledged quite a reduction in emissions, but compared to its near-peers, or countries with the same development level, the U.S. is actually pulling less weight. Let’s look at some examples.

We’ll start with regulating emissions standards — as this is what’s mostly discussed as unfair and harmful to the U.S economy. Mind you, the NDCs for emissions standards are selected by the countries themselves, that’s why they’re called Nationally Determined Contributions.

The U.S.’s NDC “intends to achieve an economy-wide target of reducing its greenhouse gas emissions by 26-28 percent below its 2005 level in 2025 and to make best efforts to reduce its emissions by 28 percent.”¹ This effort would bring the U.S.’s emissions to about 4,500 million metric tons by 2025 (see Figure 2). On a per capita basis, that’s about 14 metric tons per person for a population of around 321.4 million. How does this compare to our near-peers in Europe?

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Figure 2 – From U.S.A. First NDC Submission (Page 1)

The EU’s first NDC called for a “binding target of an at least 40 percent domestic reduction in greenhouse gas emissions by 2030 compared to 1990.”² Due to the two different time ranges, they’re tough to compare. But what helps us compare is the per-capita goal. The EU projects that with their NDC, their emissions will equate to around six tons CO2 equivalent per person; that’s eight less than the U.S.’s 2025 goal mentioned above.

Thus, for emissions standards, the EU took a much tougher approach. But, what if they’re cheating their NDC and we’re following ours! Luckily, there’s an organization named the Climate Action Tracker which tracks countries’ efforts toward their NDCs. Both the U.S. and EU earned ratings of “medium,” (before President Trump announced the US’s departure) so it seems neither are cheating on their pledge. You can see these ratings and more here. But what about the money? Because, it’s always about the money.

For the financing, we need to mention a few things about the data. First, the money to assist developing nations and promote climate-friendly development projects is handled by an entity called the Green Climate Fund. You can read the Green Climate Fund’s status of pledges document to check all of our work here. For the purpose of comparison, we’re going to look at “disbursed” funds, not pledged or approved. The reason? Countries can always revoke a pledge or revise an “approved” number; they can’t get back cash they’ve already disbursed. We’ll also use only U.S. dollars so as not to confuse anyone or force people to do math. And, most importantly, we’ll give you the U.S. dollar amount, then discuss it as a percentage of Gross Domestic Product. For those that don’t know, GDP is a common measure of a country’s economic output. It is measured by adding personal consumption, business investment, and government spending together, then adding and subtracting exports and imports, respectively. Why would we look at the data as a percentage of GDP? Because, it’s unfair to say the U.S. contributed more than Switzerland based purely off dollar amounts when the U.S. has deeper pockets to pull from. It’s like saying someone who’s well off and gave $10 to charity contributed more to the cause than the homeless person who gave his last $5. With this out of the way, let’s look at the facts.

The U.S. has disbursed $1 billion to the Green Climate Fund, or .006 percent of its GDP. Its near-peers?

• France: $277 million; .011 percent of GDP — about double the U.S.
• Germany: $420 million; .013 percent of GDP — about double the U.S.
• Japan: $692 million; .017 percent of GDP — more than double the U.S.
• Sweden: $458 million; .093 percent of GDP — 15 times the U.S.
• Switzerland: $103 million; .015 percent of GDP — more than double the U.S.
• United Kingdom: $514 million; .018 percent of GDP — more than double the U.S.

As you can see above, as a percentage of GDP, the U.S. hasn’t paid as much as its peers and would have to double its disbursements to get there.

Reality – The Paris Agreement is inherently incapable of treating parties to the agreement unfairly because it has no enforcement arm and is operated through voluntary pledges on emissions regulation and financial support. Even if there were a form of enforcement, the U.S. made a weaker pledge for emissions regulation than most of its peers and has disbursed less money as a percentage of GDP than most of its peers. So, was the Paris Agreement unfair to the U.S.? No.

The China Argument – Some will bring up China as a reason the Paris Agreement is unfair to the United States. Those that do have a point. China, being an under-developed nation, is held to different standards than the U.S. While the U.S. and its peers are expected to reduce their carbon emissions, China and its peers are expected to cap theirs. China, through their NDC has pledged to cap their emissions at 13,000 metric tons by 2030 while the U.S.’s pledge brings the U.S.’s emissions output to around 5,500 metric tons. So yes, China has an ability to emit more waste and in-turn continue to use fuels and processes that the U.S. will have to reduce and/or stop. And yes, this allowance will ensure China’s growth continues mostly uninhibited, allowing China to almost match the U.S.’s economic output by 2030. Proponents of the “China vs. U.S. proves the Paris Agreement is unfair” argument have a point, but…

When discussing China vs. the U.S. we have to remember a few things. One, China is going to grow its GDP faster than the U.S. regardless of any regulations on carbon emissions. China’s population is three times larger than the U.S.’s, meaning they have a much larger workforce and, as more and more of their population becomes middle-income, their production and consumption is going to quickly grow. Two, as solar, wind, and other renewable energies become more advanced, their price and efficiency will begin to compete with that of non-renewable energy sources, thus China would be able to use renewable energy or non-renewable energy and see higher growth than the U.S. regardless of type used.

Free Wheel Opinion – Climate change is a highly debated topic and many debate the science behind it. But let’s do a thought experiment quick. Think in terms of the worst possible outcome.

Let’s say we (the citizens of the United States) believe in climate change and work to counteract it but we end up being wrong. Worst-case scenario? We waste money, we lose a few industries and people lose their jobs, but we also create a few industries while we’re at it. China becomes a near-peer in GDP but are still decades behind us militarily.

Now, let’s say we choose not to believe in climate change and we’re wrong. Worst-case scenario? The Earth’s climate is thrown off-kilter, ecosystems fall apart, unprecedented severe weather occurs, and with all this comes a monumental loss of human life. Which do you think we should take the leap on?

Bonus Reality: What did Trump do by Announcing Intent to Depart the Paris Agreement?

On June 1, Trump made the announcement that he intends to pull the U.S. out of the Paris Agreement. What does this mean?

The answer: not much. Before we even discuss the fact that many states, cities, universities and corporations have made their own pledges to continue climate-saving efforts, let’s look at withdrawal from the agreement itself.

Article 28 of the Paris Agreement (English version) states:

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Figure 1 – Paris Agreement (English), Article 28, Paragraphs 1, 2, and 3.

Thus, although Trump announced intent to withdraw, the U.S. will not be able to officially depart the Paris Agreement until November 4, 2019, since the U.S. “entered into force” on November 4, 2016. You can see the status of ratification for all member-states here.

Now, with an understanding that the U.S. can’t officially leave until 2019, does it actually matter that we’re leaving? Not much, since many U.S. cities, states, universities, and companies have pledged to push forward with the U.S.’s NDC. Unfortunately, if you’re against the agreement, and fortunately, if you’re in favor of it, the Paris Agreement actually has a way for a coalition of sub-national groups to enter the agreement called the Non-State Actor Zone for Climate Action, which will allow U.S. cities, states, universities, and companies to join the Paris Agreement as a coalition and report status on emissions efforts. And thus far, over three governors, 80 universities, 100 businesses and 340 mayors (and rising each day) have made an un-named coalition to do just that.

Reality – It seems that despite the president’s wishes the U.S. will unofficially continue to be a part of the Paris Agreement.

The Party Lines:

Left of the Aisle:

 

Right of the Aisle:

References
1 – U.S.A. First NDC Submission, Page 1
2 – LV-03-06-EU INDC, Page 1

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